CEE Bonds

Risky assets are often beholden to perceptions of geopolitical risk, though in recent times that has been a minor factor in price movements. Perhaps this dynamic is about to change.

Rusal bondholders are in a pickle. They have been told by the US Treasury that they have 60 days to dump the sanctioned Russian company’s bonds, but trading has halted, leaving them stuck with the debt. Investors are lost as to how to value the bonds in their portfolios and are scrambling to work out how they can legally continue to hold and mark them.

Montenegro followed Egypt to the euro bond market this week, offering investors another chance to take on single-B risk in the currency.

Panic selling has hit the Russia bond complex with investors dumping securities as they race to reduce their exposure to the country for fear of further sanctions.

The sell-off in Russian bonds is battering emerging markets investors, who are seeing the biggest spread widening since sanctions were first imposed on the country in 2014. Not only have the bonds of freshly sanctioned Rusal tanked but other Russian companies are selling off as investors fear they may be next, and the rot is starting to spread to the wider central and eastern Europe region as well.

The Eurasian Development Bank has embarked on a roadshow for a three to five year tenge denominated Eurobond.

Equity investor sentiment on Russia has been upended in the space of a weekend after the shock release from the US Treasury on Friday imposing a fresh set of sanctions on Russia which has torpedoed the fortunes of aluminium producer EN+ and its owner Oleg Deripaska.

Turkish real estate developer Ronesans Gayrimenkul Yatirim (RGY) has announced plans for a global roadshow ahead of a planned dollar Eurobond debut.

Turkcell İletişim Hizmetleri, the largest mobile operator in Turkey, set final terms for its $500m bond on Thursday afternoon in London.

Ukrainian steel and mining company Metinvest sold its dual tranche five and eight year bond on Wednesday, but the thin oversubscription and pricing at the wide end of final price guidance have suggested a meagre appetite for hairier bits of emerging market debt.

Turkcell İletişim Hizmetleri, the largest mobile operator in Turkey, has released initial price guidance for its 10 year dollar benchmark.

Ukrainian steel and mining company Metinvest has released initial price guidance for its dual tranche bond, which is bring printed in conjunction with a tender offer for the company’s 2021s.